According to a consumer survey conducted by IRI in January 2018, 76% of American shopping journeys now begin online. Whether to research products, compare prices, make reservations/ bookings, or purchase goods, …. consumers are going digital-first.

This digital-first mentality suggests that retailers big and small, local or national, need to pivot together in order to leverage the multitude of digital solutions that create convenient, multi-faceted, and unique shopping experiences for customers.

However, more often than not, digital solutions are not so easy or inexpensive to implement. Small, local businesses that are typically run by limited staff with limited resources often lack the knowledge and capacity to adopt new systems and processes; much less invest in new gadgets and software.

Back in 2012, a report by the Center for an Urban Future entitled “Smarter Small Businesses” confirmed that the failure to embrace technology was hurting business owners in lower-income, minority communities. At the time, nearly 9 out of 10 respondents reported having a computer, as many as one in five low- to moderate-income proprietors did not – and this was hurting their ability to do proper accounting and to get bank loans.

So how might your downtown organization, chamber of commerce, or local business service office tackle this digital divide? Well, the answer is really quite simple. Modernize that storefront improvement program that already exists in most commercial districts!

When you break down the storefront of the future, it can no longer simply be defined by its windows, awnings, signage, building façade, and doors. It needs to also include everything we’ve become familiar with as consumers in the 21st century – the digital Point-of-Sales system, the store Instagram/Facebook/ Twitter account or #hashtag, the store website that is synced to in-store inventory, and the Yelp and Google reviews, and more!

Like a traditional storefront improvement program, the storefront-of-the-future improvement program should include key elements such as,

an Audit/ Baseline Assessment

Educational sessions by providers and Educational Resources such as guidebooks/ handbooks

Technical Assistance

Financial Assistance

Celebration of Success

A professional digital service consultant may be brought on to diagnose the strengths and weakness of an individual storefront – with consideration for the store’s online visibility on various search engine and social media platforms (Google, Yelp, Facebook, Twitter, Instagram), store’s point-of-sales system integration with other consumer-facing platforms and store calendars etc., store’s ability to sell online and deliver products, store’s online back-office processes, etc.

STEP ONE

AUDIT/ BASELINE ASSESSMENT

The downtown organization might hold information sessions to educate business owners on the available search engine and social media platforms. Google, for example, partners with local organizations to conduct ‘Get Your Business Online’ events that train business owners on how to use Google to increase store visibility online. Or, consider dedicating a page on your downtown website to the myriad of resources already available online related to digital marketing. Link the page to resources like Facebook Business, for example, which has uploaded numerous free online courses for business owners to participate in at their own time. And finally, publish a list of pre-approved vendors who provide retail tech products and services for interested business owners to solicit help from

STEP TWO

EDUCATION

Enlist the help of professional digital marketing consultants, web developers, or digital business tool providers to provide one-on-one assistance to small businesses to set-up/redesign store websites/ Google and social media pages/digital back-of-office systems

STEP FOUR

Feature ‘Best-in-Class’ local businesses who have successfully adapted to the changing consumer journey and implemented one or more digital solutions to attract and retain customers

STEP FIVE

CELEBRATE SUCCESS

As technology continues to permeate the retail sector, it’s important that we adapt the toolbox of resources we are providing to our local entrepreneurs and small business owners. We’re so excited to see organizations like Downtown Alliance here in New York City and Digital Main Street in Canada lead the movement with well-organized programs that focus financial and technical assistance on implementing digital and tech solutions that will create resilient Storefronts of the Future.

In case you haven’t heard, the Opportunity Zone is a tax incentive that was passed as part of the Tax Cuts and Jobs Act of 2017. Opportunity Funds created in these zones allow investors to defer federal taxes on any recent capital gains until December 31, 2026, reduce that tax payment by up to 15%, and pay as little as zero taxes on potential profits from an Opportunity Fund if the investment is held for 10 years (Read more in a previous blog post). The tool could potentially help rebuild distressed and low-income communities around the country, if used cautiously and intentionally. So far, the tax breaks for certain investments in designated census tracts has already led to the creation of nearly $1 billion in new funds. The Treasury Department expects an overall $100 billion in private capital will be deployed through the tool.

As with various other tax incentives, the key ingredient to the successful investment of Opportunity Funds in our neighborhoods will be the core mission driving those investments. Without the right mission and goals guiding the investments, Opportunity Zones may become inequitable places that end up displacing existing residents, businesses, and jobs. In New York, there is already fear rising from Opportunity Zones being located in relatively posh, or gentrifying, neighborhoods “with projects from sponsors better known for luxury skyscrapers than affordable housing”.

We need local community groups, philanthropic foundations, and mission-driven organizations to steer the efforts in Opportunity Zones, with clear action plans and strategies.

To achieve this, city governments and community-based organizationsare working with third-party, independent advisors who can help prioritize projects and provide market expertise. The California Opportunity Zone Partnership, organized by non-profit Accelerator for America, with partnership of the State of California, Energy Foundation, Cities of Oakland, SF, San Jose, and LA will be doing exactly that by providing grants and technical expertise to three small-to- medium-sized California cities to help them attract inclusive investments into their Opportunity Zones. In Louiseville, KY, Accelerator for America has already supported the city to engage a consultant to create a replicable product—an Investment Prospectus—to enable the city to communicate its competitive advantages, initiate local partnerships, and identify sound projects that are ready for public, private and civic capital.

Here at Larisa Ortiz Associates, we conduct similar work in mixed-use urban places, often times located in Opportunity Zones, to help municipalities prepare an actionable and market-based investment prospectus that help guide private investment. As part of our SMAR2T Approach, we carry out comprehensive market analyses that account for challenges and opportunities in the physical environment, business environment, local administrative/ regulatory framework, and demographics.

The time is now – opportunity funds have 31 months to deploy the capital and investments need to be made by the end of 2021 to qualify for the minimum incentive to reduce their required 2026 tax payment (investors get a step-up in basis only if opportunity fund shares are held for at least five years). And to qualify for the full seven-year tax break (15% off tax bill), investments will need to be made by the end of this year!

If your city or neighborhood is looking to prepare a mission-driven and market-based investment prospectus for Opportunity Zones, get in touch with us!

Our recent work in West Hartford, CT has served as a reminder of the positive role that enlightened property owners can play in improving downtown retail environments. In our research, we came across an older article memorializing the life of Richard Mahoney, otherwise known as “Mr. West Hartford Center”. For those unfamiliar with West Hartford Center, it is the historic downtown of the community of West Hartford, surrounded by walkable, dense residential neighborhoods that continue to attract people looking for small town living. (I think of places like West Hartford when naysayers say that millennials are moving to the suburbs when in actuality they are moving to towns like this which offer the best of urban living in what are typically categorized as “suburban” environments, yet are anything but!).

Robert Mahoney’s efforts to revitalize West Hartford include lessons and best practices that still resonate with us today. He utilized quite a number of shopping industry tricks of the trade. For readers of this blog, you know that we firmly believe that downtown environments need to be managed in ways more akin to shopping centers – and we love finding examples of how this can work in downtown environments.

Back to Mahoney, here are a few examples of what he did to enliven the downtown according, taken (mostly) from an article in The Hartford Courant. We loved that these interventions aligned so well with our SMAR2T framework, so we took the liberty of organizing the elements of Mahoney’s approach along those lines.

Mahoney supported growth in local Administrative Capacity

Early on he realized how critical a viable merchant’s association was to overall revitalization efforts and required his own tenants to join the Chamber of Commerce and the Merchants Association. He also asked other landlords to match their tenant’s contributions to these organizations.

Another key element of Administrative Capacity is leadership – and Mahoney’s leadership and advocacy was clearly instrumental in advancing some of the initiatives outlined here. In our experience, having someone like Mahoney, who is able to build coalitions and strike compromise and who has the confidence of stakeholders from both the public and private sectors, is key to advancing many revitalization efforts. A great leader is someone who is pretty good at herding cats, and it seems that Mahoney had that quality.

Encouraged on-going Redevelopment in both the Public and Private Realms

Landlords were encouraged to maintain and refresh their stores regularly to keep them from looking dated. In the retail industry we call this redevelopment or repositioning. Malls typically do a refresh every ten to fifteen years or so to stay competitive and current.

Investments were made in holiday lights and decorations, as well as planters on public sidewalks (that were watered!)

While the article failed to mention Mahoney’s role in the shared parking lot to the rear of the stores, which required complicated easements and land swaps to allow for access and municipal maintenance, it probably wouldn’t be a stretch to suggest that he had something substantial to do with it. We believe this shared parking initiative helped ensure that parking supply was sufficient to meet demand. Frankly, we were a bit surprised that parking woes did not come up first among local business concerns as parking is typically the number one issue that drives business complaints.

Promotion and Marketing Efforts to drive Retail Sales

Holiday television advertisements helped raise awareness of the district

Evening shopping hours

Improvements to Tenant Mix

Mahoney was selective in filling vacancies – sometimes choosing to leave a space vacant until the right business came along. (This is notable for communities looking to institute vacancy penalties. Sometimes vacancies are necessary in support of longer term goals).

While Mahoney came to see the value in restaurants, he initially believed that too many restaurants decreased retail traffic. He discouraging landlords from allowing more than one food establishment per property and also once turned down a Starbucks because he thought it would compete with another cafe in the downtown. He didn’t like banks or financial companies because of the “boring face” they offered to passersby.

Putting it all together, this was quite a comprehensive and well thought out effort to revitalize the downtown and by every indication it worked extremely well. Today West Hartford supports over a hundred retail and service-oriented businesses and continues to pull visitors from throughout the region. It maintains strong retail leasing fundamentals (low vacancy rates and high rental rates) and a good mix of both national chains and mom-and-pop stores. As a subconsultant to FHI, the planning firm leading an update of the town’s Plan of Conservation and Development, we are thrilled to play a role in developing the market research and planning tools that will help ensure that West Hartford Center sees another decade of success. As we develop strategies for the next ten years, you can rest assured that the legacy of Robert Mahoney will continue to guide our efforts.

Larisa Ortiz Associates is a full-service retail planning firm. For more information on how we can help your downtown or mixed-use development, please contact us at info@larisaortizassociates.com or call us at 718-205-5116.

We are on a tremendous high after spending three days in San Antonio last week exploring that amazing City and meeting so many inspirational peers doing great work in downtowns and neighborhoods nationwide.

Let’s just say it started with a bang! LOA Principal Larisa Ortiz gave one of the keynote master talks, sharing a stage with Colorado Governor Hickenlooper (a potential presidential candidate?) and shared her retail philosophy which is rooted in the subject of ecology, known as “microclimates”. Larisa coined the term “retail microclimates”, a concept that is now fundamental to our work at LOA. It was truly a thrill to see our ideas resonate so strongly with an audience of over 1,000 conference attendees!

We were also excited that LOA projects were extremely well represented at the Downtown Achievement Awards through our partners, who were recognized with Excellence Awards in Planning, including:

The plan helped jumpstart a previously dormant BID formation effort in Central Square and has helped the City realign and reprioritize its resources towards policies that enhance the administrative capacity of local merchant associations, advocate for changes in zoning policy that allow for new retail concepts, and programs that embrace the thriving experiential and dining sector.

The City of New York’s Neighborhood 360 Program, which has at its center the Commercial District Needs Assessment tool, is based on a methodology developed by LOA with the support of the Local Initiative Support Corporation (LISC). To date, the City has selected ten neighborhoods to test the Commercial District Needs Assessments (Read them here). The Commercial DNA methodology – as we now call it – will be the subject of an upcoming publication by the Local Initiatives Support Corporation. This publication will be available free of charge and will give commercial district planning entities across the nation a chance to gain a deeper understanding of how to conduct more comprehensive district diagnosis. Stay tuned for updates on the publication – due out this Winter!

We’d like to also extend our congratulations to Stantec for its winning plan for the Oswego Downtown Revitalization Initiative. LOA served as retail consultant on the project team in 2016. The New York State Downtown Revitalization Initiative (DRI) is now in its third year, and LOA has worked in eight of the thirty DRI communities as sub-consultants to larger planning firms. In fact, Larisa’s master talk was peppered with examples from various DRI Communities. Stay tuned for the video of her talk, which received rave reviews!

And let’s not forget our breakout sessions!

LOA Associate, Nur Asri, led a packed session on downtown marketing and Engaging Millennials and Shoppers in the Digital Age. With panelists Aongus Burke (Facebook), Jim Blakeslee (Geocentric), and Brian Carr (Midtown Atlanta), the session covered a range of tools to get digitally-native customers shopping downtown and especially at small local businesses. From downtown websites and apps to Facebook pages and events, there are numerous ways that BIDs and their local merchants can market products and services online. As omni-channel shopping becomes the reality, digital marketing will be fundamental to the overall downtown experience.

Larisa also sat on a panel on Zoning for Retail and participated in a robust discussion about gentrification and neighborhood change. To continue to keep abreast of these very important topics, don’t forget to subscribe to our quarterly CDAdvisor newsletter and follow our blog!

Across the country neighborhoods are suffering from a lack of access to quality grocery stores and fresh produce. This phenomenon is popularly known as the food desert. Food deserts limit residents’ nutritional options. When combined with other factors like household incomes and educational attainments, food deserts may result in numerous public health challenges such as high levels of obesity and malnutrition. Today, almost a quarter of the country’s ZIP codes are considered food deserts.

Unfortunately, food deserts have also been found to disproportionately affect low-income neighborhoods. In fact, more than 55% of all ZIP codes with a median household income of less than $25,000 can be categorized as food deserts. Addressing food deserts has therefore become an equity issue for many downtowns and cities.

Although attracting a new grocery retailer and building a new supermarket in food deserts may appear to be a direct solution, numerous studies have found this strategy to have very little real impact on the eating habits of households in the area. Three separate studies conducted by researchers around the country found that the introduction of a new supermarket does not result in significant changes in household food availability, children’s dietary intake, reported fruit and vegetable intake or body mass index. Given that the grocery attraction strategy can be extremely costly and time-consuming, especially in underserved markets, it’s important that cities consider alternative solutions that may be slightly cheaper but more effective.

Often, underserved markets and food deserts already have an existing base of corner stores, delis, and bodegas (whatever you’re calling it in your region). These convenience stores don’t necessarily carry fresh food but they are existing assets in these neighborhoods that can be leveraged. These stores are already in physical spaces and because they’re in convenient locations (I mean, they’re on every other corner) they’re already being used by residents. These factors make them a great starting point for increasing the supply of fresh produce and healthy foods in food deserts.

Many cities have acknowledged the strength of these assets and begun to establish corner store incentive programs to help introduce fresh produce on the shelves of corner stores. These initiatives have been structured in various ways but they largely aim to address three of the biggest hurdles faced when re-designing corner stores as fresh food access points. Here’s what you need to do if you’re thinking of leveraging your existing corner stores:

Store owner engagement and education

Unfortunately, many early corner store initiatives overlooked the importance of engaging corner store owners and their staff. These programs would typically start with a survey of residents to get a sense of their grocery shopping patterns or a physical assessment of corner stores. Without building the support and coalition among store owners themselves, however, many programs fell through because there was a lack of understanding of the barriers faced by business owners and a lack of understanding of their business models.

One city that overcame this is the Healthy Corner Store Initiative in Providence RI. Before even surveying customers, the Initiative set out to survey corner store owners in order to garner interest and participation in the program.

Financing

Expanding corner stores’ product offerings to include healthy foods and fresh produce can be costly to business owners. There are costs involved in purchasing these additional products, in purchasing new equipment to house these products, in re-outfitting stores to accommodate additional shelves and equipment, in purchasing new point-of-sales systems that accept EBT, and finally in improving facades to attract new customers.

As such, healthy corner store programs need to include financial incentives that can offset all of these additional costs to corner store owners. Programs across the country offer a mix of loans and grants to fund the various interior and exterior store improvements. In Philadelphia PA, for example, over one hundred corner stores were provided with investments ranging between $1,000 and $5,000 to expand inventory of produce and other healthy products.

Operations and management

Often the greatest hurdle in converting corner stores is the lack of knowledge amongst small business owners on how to purchase, price, stock, store and handle fresh produce. There are many ways to address this.

First, education. The St Louis Healthy Corner Store Project hires mentors with grocery retail experience to provide technical assistance and support to participating corner stores. And in Philadelphia PA, over 480 hours of training was provided between 2004 and 2012 to corner store owners.

Second, B2B support. To solve the difficulties faced in purchasing fresh produce in small quantities, several programs have connected corner stores with smaller local suppliers like farmers or wholesale warehouses willing to provide produce at no minimum purchase amounts. If there’s already a farmers market operating nearby, think about connecting those farmers with corner stores.

Although we hate to admit it, sometimes attracting a full service grocery store isn’t the best option.

We must remember, however, that bringing fresh and healthy foods closer to underserved communities is only one step in the process. The availability of these goods must also be marketed and promoted to the right audiences. And information about how to cook these products needs to be made easily accessible.

Partnering with existing local medical institutions and health organizations is a great way to market corner store improvements and educate residents on how to prepare healthy foods. Montefiore Medical Center in the Bronx, for example, offers cooking demonstrations weekly in the community in partnership with City Harvest.

Addressing food deserts is an enormous task and we need to be aware of all the options available. If your food desert already has thriving corner stores that already serve local residents, then think about how these assets can be leveraged to close the gap in access to fresh produce and healthy foods.